LANSING, Mich. (AP) — Michigan’s new era of health care begins Tuesday, as many of its 1.1 million uninsured residents start deciding how best to obtain coverage required under the landmark federal health care law.
A new online insurance market will launch, giving lower- to middle-income workers without insurance the chance to buy a private plan with the help of tax credits.
Though Tuesday is the first day to sign up, there is no rush. The deadline to be covered on day one — Jan. 1 — is Dec. 15. And people have until March 31 to sign up for a plan on the “exchange” without being penalized.
All told, roughly 450,000 more residents could have insurance in 2014, according to outside estimates. Within five years, the state’s uninsured rate could drop from 11 percent to 6 percent of the population.
While most Michigan residents still have insurance through an employer, the recession and rising premium costs were unkind to many employees. More than a half-million people lost their private insurance from 2008 to 2011, according to the Center for Health Care Research & Transformation at the University of Michigan.
Those still with employer insurance are paying a lot more for it. Businesses increased employee premiums by half in the last decade. Deductibles more than doubled.
“The exchanges could offer choices to people who have really been left out or have lost affordable coverage,” said Marianne Udow-Phillips, the center’s director. “Each individual is going to have a different circumstance.”
Tuesday not only is the start of enrollment, it also is when the public first finds out how much coverage will cost.
Michigan will make public premiums, cost sharing and designs for roughly 140 plans offered by 13 state insurers. A resident on average will have 43 plans to pick from, with those in metropolitan areas enjoying more choice and rural residents likely seeing less.
People will pay dramatically different premiums depending on their income, family size, age, hometown and tobacco use.
The Obama’s administration recent review of average premiums on the Michigan exchange was positive, showing that a family of four with $50,000 in annual income could get a “bronze” plan for just $80 in monthly premiums thanks to tax subsidies.
But in choosing the lowest premium, the family would see higher cost sharing through annual deductibles and copayments. Avalere Health studied six other states and concluded the deductible for a mid-range “silver” plan averages $2,250, more than twice the typical deductible in employer plans.
To review and pick from four levels of coverage, people should go to http://www.healthcare.gov beginning Tuesday.
Despite the inherent complexities of medical insurance and the inevitable glitches to come with such a massive rollout of new information technology, the health law’s advocates say many people should be able to enroll themselves. If not, “navigators” and counselors will walk them through the process.
“People should go ahead and apply right away to determine where exactly they are. Most people don’t know exactly where their income falls,” said Jan Hudson, senior analyst with the Michigan League for Public Policy.
The poor or near-poor earning up to 133 percent of the poverty line will be steered to Medicaid in six months assuming the federal government OKs the state’s “Healthy Michigan” Medicaid expansion plan.
Those buying their own plan will see annual out-of-pocket expenses capped at $6,350 for an individual, $12,700 for families. Those below 250 percent of the poverty level will get help with out-of-pocket bills.
Someone who is healthy and goes to the doctor once a year might choose a lower premium and pay more out of pocket. Someone who is chronically ill and needs multiple medicines might want a higher premium with fewer out-of-pocket expenses.
Udow-Phillips said the exchange could especially help many early retirees who are too young for Medicare and now are uninsured or buy expensive coverage on the individual market. The health law allows insurers to charge older adults up to three times more than younger ones. That is less of a spread than in Michigan now.
The break for older people could hurt younger residents, though, who might decide to pay a fine instead of getting insurance.
One thing unique to Michigan is competition.
Of the 36 states in which the U.S. government will run or support a health marketplace, Michigan has the highest number of participating insurers. The total number of plans is above the national average, too.
“We have a lot of competition in this state for the first time among insurance companies. That’s very exciting,” said Don Hazaert, executive director of Michigan Consumers for Healthcare, which was awarded money to coordinate in-person assistance to help people buy insurance.
The umbrella group plans to pay $25 each time an agency enrolls someone.
Nonprofit organizations and low-income community health clinics will be crucial to signing up the uninsured because Michigan lost out on $31 million in federal money when Republican lawmakers rejected GOP Gov. Rick Snyder’s plan to run the exchange or at least partner with the federal government on it.
Snyder is concerned about how the federal launch will go and expects confusion. He pledges that his administration will still direct callers to the right resources.
One such place is Enroll America, a coalition of health companies and advocates that deployed full-time organizers and volunteers here because Michigan is a big state with more than 1 million uninsured and to supplement outreach efforts since state government has a limited role. They are knocking on doors, visiting churches and calling people at home to get the word out.
“We’re laser-focused on cutting through the noise and giving folks the just-the-facts information they need and want so they can make the best health care decisions for them and their families,” spokesman Shawn Dhanak said. “We’re telling people regardless of their situation, their circumstances, what their income level is, everybody on Oct. 1 should visit healthcare.gov. That’s the first step.”